As the real estate market continues to boom, more and more people are looking for ways to get in on the action. But what if you don’t want to buy a home? Or you don’t have the money to buy one? Don’t worry – there are still plenty of ways to profit from the real estate market without purchasing a property. Here are some of them.
1) Invest in real estate investment trusts (REITs).
By investing in REITs, you can profit from the real estate market without having to buy a home. The stock market is not just for stocks anymore. You can now invest in the real estate market by purchasing shares of a real estate investment trust (REIT).
For example, let’s say that you have $5,000 to invest. Instead of buying just one home, you can purchase 100 shares of a REIT for the same amount of money. That way, you can get your feet wet in the world of real estate investing without having to spend all of your savings on one piece of property.
2) Contribute to a real estate IRA.
If you are self-employed or earn $200,000 per year or less, another innovative way to invest in the real estate market is to open a self-directed IRA and purchase real estate through it. You will be able to choose from a wide variety of investment options, giving you the freedom to invest your money as you see fit.
As a bonus, if you lock your money up for at least five years before taking it out of your IRA, you will not have to pay any taxes on the profit. This is a great way to invest in real estate without having to pay massive capital gains tax bills after selling your property.
3) Invest with RealtyShares.
If real estate IRAs are not for you, another innovative way to invest in real estate without buying a property is by using the crowdfunding platform RealtyShares. You can support real estate projects that you like and profit from when they go up in value.
When you invest with Realty Shares, you do not buy an equity stake in the project; instead, you buy securities backed by cash flow. This means that your investment will be supported by real estate, giving you a great way to invest in the real estate market without buying property.
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4) Invest in notes.
If you are looking for another way to invest directly in real estate, consider purchasing notes. Notes are loans that are backed by property. If the borrower defaults on their loan, you, the note investor, will foreclose on the property and sell it.
You can purchase notes through companies like BiggerPockets. However, it is essential to note that this real estate investing carries certain risks. For example, if you are buying a note, make sure that you understand all of the restrictions put on the property because if it meets specific criteria, you may not be able to foreclose on the home. Keep this in mind as you look for a note to invest in.
5) Invest with Fundrise.
If you are looking for another way to invest in real estate without buying property yet still want more control over your investments, look into Fundraise. Fundraise is a platform where you can choose from various real estate projects in which to invest.
Unlike other real estate crowdfunding platforms, when you invest with Fundrise, you buy an equity stake in the project. This allows you to own part of the property you are investing in and enable you to share in the profits.
6) Buy rental properties.
If you have a lot of cash on hand, yet want to invest in real estate directly, consider purchasing a rental property. This is great for real estate investors looking for a long-term investment that will not require much work.
When you own rental properties, your tenants pay the mortgage for you. Meanwhile, all you need to do is have the right tenants, maintain the property, pay for minor repairs once in a while, and collect rent every month.
3) Invest in mortgages.
Another smart way to invest in real estate is by investing in mortgages. This does not necessarily mean loaning money directly to homeowners; instead, you will be providing financing for real estate professionals and commercial developers.
When you invest in mortgages, you can choose from various investments with different risk levels and return rates. Your investment options include private mortgages, real estate investment trusts (REITs), government-backed loans, and certificates of deposits (CDs).
Conclusion
It’s no secret that real estate prices are on the rise. Whether you want to get in early and make a profit, or your goal is to purchase a home for yourself or family members, it can be complicated knowing where to start. Fortunately, there are several ways people like you can take advantage of this boom without buying the property themselves.